June 2020

Four of the 10 costliest hurricanes in U.S. history have impacted Alabama: Hurricane Michael in 2018, Hurricanes Irma and Harvey in 2017, and Hurricane Katrina in 2005.

There were 54,348 flood insurance policies in Alabama in 2018. Standard homeowners policies typically do not cover flood damage. Flood insurance is covered by the National Flood Insurance Program, but private flood insurance is becoming increasingly available.

There were 784,657 people living in coastal areas in Alabama in 2015, up by 2.5 percent from 2010, according to the U.S. Census Bureau.

In Alabama, about 52,000 single-family homes were at risk in 2020 for storm surge damage from hurricanes up to Category 5 strength, according to CoreLogic, Inc. These homes would cost $9.4 billion to completely rebuild, including labor and materials.

The Alabama Insurance Underwriting Association (AIUA) was voluntarily formed in the early 1970s by the insurance industry in cooperation with the Alabama Department of Insurance as a market of last resort to provide property and windstorm and hail insurance in the coastal areas of Alabama.

The AIUA’s exposure base has expanded rapidly. The exposure to loss—insured value of all properties—was $5.6 billion in fiscal year 2018 up from about $3.3 billion for fiscal year 2010. The AIUA had about 21,000 policies in force in fiscal year 2018 compared with 24,403 policies as of 2017.

AIUA policies have a hurricane deductible that applies only in the event of a hurricane. The standard deductible for all other perils is $500.

(1) Property losses only. Excludes flood damage covered by the federally administered National Flood Insurance Program. Ranked on dollars when occurred. As of April 17,2020.
(2) Adjusted for inflation through 2019 by the Insurance Information Institute using the GDP implicit price deflator.
(3) Insurance Information Institute estimate based on data from catastrophe risk modelers, reinsurance companies, the Property Claims Services unit of Verisk Analytics, the Federal Emergency Management Agency of the U.S. Department of Homeland Security, and the Florida Office of Insurance Regulation. These estimates are preliminary because the organizations involved periodically resurvey the events, and the severity of losses and other factors create a high level of uncertainty surrounding the ultimate loss figures.

(1) Includes residential and commercial Gulf and East Coast properties, as of December 31, 2015. Ranked by value of total insured coastal property.
(2) Total exposure is an estimate of the actual total value of all property in the state that is insured or can be insured, including the full replacement value of structures and their contents, additional living expenses and the time value of business interruption coverage.